The news broke yesterday that TSMC had halted production on 28nm production in mid February for an undisclosed reason. SemiAccurate thought this strange as the only company that is admitting to problems with TSMC's 28nm process is NVIDIA, but at least production was scheduled to restart by the end of March. Today from DigiTimes we hear a more positive story about not only the 28nm but also the 20nm process line as TSMC predicts that the demand for chips from their customers could go as high as 95% of their capacity. Perhaps because of the lack of pressure because of a currently well stocked channel they shut down the line to ensure no preventable problems would prevent them from meeting this high demand?

"Taiwan Semiconductor Manufacturing Company (TSMC) chairman and CEO Morris Chang has commented that development of 20nm and 28nm processes is progressing well. The market believes TSMC's capacity utilization rate in second-quarter 2012 should be close to 95%.

Industry sources pointed out that TSMC's capacity utilization of its 28nm and 45nm processes at its 12-inch wafer plant has not decreased and delivery usually takes 8-10 weeks.

Equipment makers also indicated that TSMC has been ordering equipment and installations will be completed in first-half 2012.

Industry sources added that other Taiwan-based IC design houses have been experiencing increasing orders. The market was pessimistic before the Lunar New Year holidays causing inventory levels to be low. This has induced the recent wave of increased orders."

If you caught the podcast last night you would have heard Josh discussing NVIDIA's year end financial conference call, otherwise you will have to wait until the 'cast is posted later this week. Until then you can read SemiAccurate's take on the call here. There is a lot of news about NVIDIA and none of it is good, from wafer yields to chip demand nothing seems to have gone right for them. Attempting to move off of their cursed 40nm line and switching to 28nm, NVIDIA has run into big yield problems as in entire wafers having issues as opposed to just some dies being bad.

Tegra is not doing so well either, with sales of Tegra 2 dropping as we approach the release of Tegra 3, which is getting a lot of bad press. SemiAccurate refers to the chip as bloated in size as well as being downright expensive to make. Combine that with the fact that NVIDIA is lagging on A15 adoption and Samsung and Apple turning their backs on Tegra and it doesn't look good for NVIDIA's mobile plans. The one ray of sunshine is that even combined Samsung and Apple do not account for even half of smartphones on the market, so there is still room for NVIDIA and Tegra to grow.

"Nvidia seems to be so far ahead of the curve that they are experiencing problems that are unique in the industry. In their recent year end financial conference call, there was enough said to draw some very grim conclusions.

Today’s conference call was a near complete validation of all the things SemiAccurate has been saying about Nvidia. Remember when we asked if Nvidia could supply Apple? Anyone notice the part about dumping early 28nm capacity, and the disappearance of 28nm Fermi shrinks? Remember how 28nm was not an issue for Nvidia, even if their product roadmap slips said otherwise. How well does this mesh with the quotes from Jen-Hsun himself on the topic?"

When thinking of foundries one first tends to think of Intel, TSMC and GLOBALFOUNDRIES, but from what TSMC's Chairman revealed yesterday you might start thinking about the Fab 4 instead. Samsung have been making DRAM and NAND memory for quite a while now as anyone who has inspected their DIMMs or SSD is well aware and their hard drive business is well known. What has not been in enthusiasts' minds is the System LSI (Large Scale Integration), component of Samsung which designs logic chips for cellphones, SOCs, sensors and many other low powered tasks.

While TSMC remains much larger than the System LSI portion of Samsung but TSMC feels that Samsung could become a major competitor over the coming year. TSMC's product lines certainly do overlap some of Samsung's currently and there are new projects in the work that TSMC sees as vulnerable. DigiTimes specifically mentions the TSV chips powering 3D TVs and the possibility of competition when Apple looks to source the 3D TVs they will be adding to the set top boxes they currently sell.

"Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, has now identified Samsung Electronics as a potential and formidable competitor in the market in which it still controls a dominant share.

During a Q&A session at TSMC's investors meeting on January 18, Morris Chang, TSMC chairman and CEO, said that Samsung will substantially expand what it calls the System LSI division. In addition to servicing its clients, the business also plays a major role in supplying Samsung's own-brand system products such as smartphones and tablets with logic chips, Chang indicated."

The 28nm process is causing a lot of problems for tech companies especially AMD who have cancelled the follow ups to Llano and Ontario, Krishna and Wichita. Not only have they cancelled the chips but they have switched from GLOBALFOUNDRIES to TSMC to have the replacement chips designed and fabbed. This is most likely because of the low yields that have been coming out of GLOBALFOUNDRIES with Llano, AMD's most successful recent design. The low volumes hurt AMD's market share since many companies would not base a product line on a chip that might not be around in volume. As well a deal is expiring in January which had AMD only paying for good dies, instead of the more usual practice of paying for the entire wafer and dealing with the bad dies as they come

That move might not be as successful as AMD hopes when you look at this article from DigiTimes. As it turns out TSMC is concerned about their ability to meet the demand for 28nm chips from their customers. It is not just AMD that is turning to TSMC for 28nm, Altera, NVIDIA, Qualcomm and Xilinx are already customers and Broadcom, LSI Logic and STMicroelectronics may join that crowd. With so many customers utilizing the same process even small problems on TSMC's lines could lead to big drops in available chips. Let us hope the days of the 40nm problems at TSMC never come back.

"Taiwan Semiconductor Manufacturing Company (TSMC) continues to see orders heat up for advanced 28nm technology, despite a general slowdown in the semiconductor industry, according to industry sources. Order visibility has stretched to about six months, said the sources.

TSMC is expected to see 28nm processes account for more than 2% of company revenues in the fourth quarter of 2011. The proportion will expand further to over 10% in 2012, as more available capacity coupled with rising customer demand boost the output, the sources indicated."

While most enthusiasts are living up to the name as far as the build up to the coming GPU refreshes from both AMD and NVIDIA is concerned, the manufacturers are quite the opposite. There are several probable reasons for this attitude, not least of which are the number of HD 6570s and GTS 450s that are still in their stock. Remember those cards from back in the spring of this year, which were the high end of a huge range of GPUs from both companies spanning $20 to either side of $100? Think that with the current generation of Llano and SandyBridge that any knowledgeable person is going to purchase one, let alone when you consider how close the release of next generation of APUs is? The two major players in the discrete GPU market not only updated the top end of their cards quickly over the past several quarters there was a widening of the market which saw current generation cards available from ~$75 to ~$750 with some segments separated by as little as $10. That translates to huge inventories at the manufacturer level which they then have to convince resellers and retailers to purchase for stock to sell to the consumer and many of those cards are still sitting there collecting dust. No wonder these same companies are leery of purchasing more stock before finding a way to recover some profit from the stock they have now.

To make things even worse there exist doubts about the 28nm process from TSMC, which DigiTimes discusses here. While AMD is still claiming delivery of HD7000 family cards before the coming year, the troubles that NVIDIA seems to be having with the same process concerns those who need to be able to buy large volumes of chips in order to turn a profit selling graphics cards. Even worse is the realization that the first cards NVIDIA will be releasing are simply a die shrink, without architectural changes. When two companies go to the same source for the same thing and one reports getting apple cider and the other apple vinegar, you really have to start to wonder what is really going on.

"While Nvidia and AMD are poised to use Taiwan Semiconductor Manufacturing Company's (TSMC's) 28nm technology to produce the GPUs Kepler and Southern Islands respectively, most Taiwan-based graphics card makers hold a conservative attitude about the new GPUs with some makers cautiously watching the market status before making any further decisions, according to industry sources.

Compared to the makers' eagerness for the previous-generation GPUs, graphics card makers are rather conservative about the upcoming 28nm chips due to concerns such as TSMC's weak 40nm process yield rate issues may re-occur in its 28nm process and weakening demand for graphics cards and lower-than-expected gross margins."

While learning about the intricacies of the Intel tri-gate 22nm process technology at the Intel Developer Forum, Senior Intel Fellow Mark Bohr surprised me a bit by discussing the competition in the foundry market. Bohr mentioned the performance advantages and competitive edge that the new 22nm technology offers but also decided to mention that other companies like TSMC, GlobalFoundries, Samsung and IBM are behind, and falling further behind as we speak.

When Intel introduced strained silicon in 2003, it took competition until 2007 to implement it. For High-K Metal Gate technology that Intel brought into market in 2007 it wasn't until 2011 that AMD introduced in its product line. Finally, with tri-gate coming in 2011, GlobalFoundries is talking about getting it implemented in the 2015 time frame.

Obviously those are some long delays but more important to note is that the gap between Intel and the field's implementations has been getting longer. Three years for strained silicon, three and a half for high K and up to four years for tri-gate. Of course, we could all be surprised to see tri-gate come from a competitor earlier, but if this schedule stays true, it could mean an increasing advantage for Intel's products over AMD's and eventually into ARM's.

This also discounts the occasional advantage that AMD had over Intel in the past like being the first to integrate copper interconnects (on the first Athlon) and the first to develop a Silicon-on-Insulator product (starting with the 130nm process); though Intel never actually adopted SOI.

Back in April there was a kerfuffle in the news about a deal penned between AMD, Global Foundries and TSMC. It is not worth repeating completely as you can follow the story by using the previous link, suffice to say that it did not indicate problems with the relationship between AMD and Global Foundries.

"AMD reportedly has completed the tape-out of its next-generation GPU, codenamed Southern Islands, on Taiwan Semiconductor Manufacturing Company's (TSMC) 28nm process with High-k Metal Gate (HKMG) technology, according to a Chinese-language Commercial Times report. The chip is set to expected to enter mass produciton at the end of 2011.

TSMC will also be AMD's major foundry partner for the 28nm Krishna and Wichita accelerated processing units (APUs), with volume production set to begin in the first half of 2012, the report said.

TSMC reportedly contract manufactures the Ontario, Zacate and Desna APUs for AMD as well as the Northern Island family of GPUs. All of these use the foundry's 40nm process technology.

TSMC was quoted as saying in previous reports that it had begun equipment move-in for the phase one facility of a new 12-inch fab (Fab 15) with volume production of 28nm technology products slated for the fourth quarter of 2011. The foundry previously said it would begin moving equipment into the facility in June, with volume production expected to kick off in the first quarter of 2012."

At 10 million 8-inch equivalent wafers produced in 2010 and an expected 20 million by 2015 it is a good thing that not only is TSMC not having major production issues anymore but it also ahead schedule with the setup of Fab 15, which will be producing 28nm chips on 12 inch wafers. Moving from 8 to 12 inches should also mean less cost per chip, though whether the savings will be absorbed by the costs of the new fab or if they will be passed straight on to the consumer is a question that cannot be answered until summer next year when they expect to get production capacity up to full speed. DigiTimes has the scoop here.

"Taiwan Semiconductor Manufacturing Company (TSMC) has begun equipment move-in for the phase 1 facility of a new 12-inch fab (Fab 15) with volume production of 28nm technology products slated for the fourth quarter of 2011, according to the foundry.

TSMC previously said it would begin moving equipment into the facility in June, and expected volume production to kick off in the first quarter of 2012.

Pilot runs at the phase 1 facility of Fab 15 are expected to start in the third quarter of 2011, following by volume production in the fourth quarter, said Jason Chen, senior VP of worldwide sales and marketing for TSMC, at a company event held on May 5. With new capacity coming online, TSMC will see its combined 12-inch capacity top 300,000 units a month."

Over the weekend conspiracy theorists perked their ears about an announced change in the way AMD will purchase 32nm chips from Global Foundries. What seemed to be odd was the inclusion of the term "paying per good chip", something that is not done in the industry, even with horrible yields such as we saw with TSMC's 40nm process. A call this morning filled in the missing details and SemiAccurate was there to report on it. The long and short of it has nothing to do with yields, as they are still looking good. Instead it seems like a way for AMD to ensure they have good supply of 32nm chips no matter how the actual production lays out and are not stuck paying for unusable chips while at the same time giving Global Foundries a way to get some money out of AMD if yields and sales are high. This is very good news for companies like ATIC and Mubadala which have a stake in both AMD and Global Foundries.

"The AMD (AMD) and Global Foundries Wafer Purchase Agreement (WPA) that was released yesterday made little to no sense. On a conference call today, AMD’s Interim CEO Thomas Seifert filled in the missing pieces, it all makes sense now.

Few things are more beloved by journalists than a 5:30am PST financial conference call, but this one was worth it, especially in light of the questions left hanging by yesterday’s announcement. We stated that on the surface, it sure sounded like AMD was tearing Global Foundries a new reticle for use in debugging their 32nm process. That however contradicted the facts we had heard on the ground, as of late last year, there simply were not 32nm yield problems. So why was the press release written the way it was, and is really going on?"